What Mexico’s President-Elect Could Mean for Tourism Amid Protectionism Worries

Dan Peltier, Skift

- Jul 09, 2018 1:00 am

Skift Take

At least Mexico’s president-elect, López Obrador, has tapped someone intimately familiar with the travel industry and how it operates locally and internationally. It’s more than the United States can say it’s done for travel in the past year and a half.

— Dan Peltier

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Since his election as Mexico’s new president on July 1, the travel industry has been mostly congratulatory toward Andrés Manuel López Obrador. But some also fear the populist and protectionist platform that got Lopez Obrador elected could portend storm clouds for the world’s sixth most-visited country.

When López Obrador takes office in December, he will join a string of populist world leaders, such as neighboring U.S. President Donald Trump, who have been elected in recent years. That Mexico became the country with the sixth highest number of international arrivals (35 million) in 2016 has many global travel industry leaders paying particularly close attention.

López Obrador has already named his Secretary of Tourism, Miguel Torruco Marqués, who studied hospitality at Cornell University and is well-known in Mexico’s tourism and hospitality sectors. Torruco Marqués has served on many tourism and hospitality association boards in Mexico and has been Secretary of Tourism of the country’s federal district since 2012.

Torruco Marqués won’t be officially appointed until after López Obrador takes office.

Tourism is one of Mexico’s largest industries, accounting for 16 percent of the countries GDP in 2016, according to an analysis by the World Travel & Tourism Council. Nearly 7 percent (8.5 million) of Mexico’s 123 million people work in the travel industry.

“Some 53 percent of Mexicans voted for [López Obrador] and that sends a very strong message of stability to the travel industry and world,” said Gloria Guevara Manzo, president and CEO of the World Travel & Tourism Council, who spoke to Skift by phone on Friday from Florida en route to meet with investors in Mexico this week. Guevara Manzo is Mexican and served as secretary of tourism in Mexico from 2010 to 2012.

Guevara Manzo is cautious of protectionist candidates in general but is optimistic for Mexico’s future. “If you look at what’s happened in Brazil before when a populist candidate was elected, we saw an impact,” she said.

“I’m already in contact with the new secretary of tourism and I’ve known him for many years,” said Guevara Manzo. “He knows what Mexico needs and is very focused on job growth in tourism.”

But like any election, Mexico investors experienced some uncertainty ahead of the July 1 vote and some private sector investment such as new hotels and airline routes had recently stalled.

During the campaign, López Obrador threatened court injunctions to halt the construction of Mexico City’s new $13 billion airport as he campaigned on a promise to cut back wasteful government spending. But last week the president-elect took a softer approach and said he won’t make a decision on the project until reviewing the contracts.

“I don’t know why the airport was politicized,” said Guevara Manzo. “Now the new government is looking at other options such as giving it to the private sector rather than the government. From WTTC’s perspective, we don’t care as long as the airport is built.”

Volaris, Mexico’s second-largest airline and largest low-cost airline, had a weak 2017 but said its routes haven’t been impacted by politics. “Our routes have not been stalled because of the election process,” said José Alfonso Lozano, director of corporate affairs at Volaris. Alfonso Lozano is also vice president of the National Chamber of Air Transportation. “Tourism and the aviation industry have grown at an unprecedented rate during the last decade, and the plans of the newly elected government are aligned to support this trend.”

“We expect a very constructive relationship with the new government,” said Alfonso Lozano.

Mexico Travel Industry Reaction

López Obrador is no stranger to Mexico’s national political scene. He ran for president twice in 2006 and 2012 before winning in 2018 and was also head of government for Mexico City from 2000 to 2005.

Los Cabos, which has suffered high crime rates in recent years but remains one of Mexico’s top destinations for international travelers, anticipates a positive impact from the election results.

“The incoming Secretary of Tourism Miguel Torruco Marqués has a big background in tourism and he clearly understands the tourism industry,” said Rodrigo Esponda, managing director of the Los Cabos Tourism Board.

Los Cabos’ airline connectivity growth plans have also continued unhindered by national politics, said Esponda. “We’re the second largest gateway for the United States in Mexico and we’re still having conversations with airlines,” he said. “Will have nonstop service from Ottawa starting this winter and in the U.S., we will have non-stops from Milwaukee, Cincinnati, and Chicago starting soon. Las Vegas is also a large market for us and we’re trying to get a non-stop flight from there as well.”

Some 1.6 million U.S. travelers visited Los Cabos last year. “The U.S. economy is showing really healthy numbers and that’s helping pump more investment into Mexico’s tourism industry,” said Esponda.

“Los Cabos has the highest daily rates for hotels in Mexico and we play a crucial role at the national level for tourism,” said Esponda.

The Mexico Tourism Board couldn’t be reached for comment before publication.

Some local tourism business owners such as Rocio Vazquez Landeta, founder and owner of Eat Like a Local Mexico City, are encouraged by Lopez Obrador’s promise to prioritize fighting corruption. “For me, this is the best thing that can happen to tourism,” she said. “Safety issues can be solved if we fix our corrupted system. I was really scared of the transition and if [Lopez Obrador’s MORENA party] didn’t win, I was expecting to have a revolution here. But this smooth transition makes me believe in a future stability for the country and therefore for tourism.”

López Obrador understands the problems small communities face and the importance of tourism for economic growth,” said Vazquez Landeta. “My bet is that he will start promoting different tourism focused on small communities and he will also move the ministry of tourism to Cancun where most of the tourists go.”

“The dollar-peso exchange favors tourism because Mexico is a very cheap country for Americans and Europeans,” said Vazquez Landeta.

Although it’s hardly a tell-tale sign of how a presidency will play out, Mexico’s markets remain relatively stable and López Obrador had appointed Torruco Marqués as his tourism advisor while he was still campaigning. If the president-elect is trying to get on the right foot with the travel industry before taking office, he seems to have taken a few good steps so far.

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Photo Credit: Mexico's president-elect has been described as a populist and the travel industry is split on how he'll address tourism growth. Pictured are Mayan ruins in Tulum, Mexico. Prayitno / Flickr